The time is ripe for corporates to embark on a journey of innovation. Having said that it is a rocky road for enterprises that have been in existence for half a century or more, having made hay when the sun shined and thus gathering a good amount of legacy systems and processes on the way. Some organisations that have have chosen to invest in innovation prefer to run the innovation labs separately, far from the core business, the reason being that innovation should not get bogged down by corporate beauracracy. A big part of innovation is experimentation — experimentation with thoughts and ideas and prototyping. Business leaders have a herculean task of ensuring innovation for the businesses of the future while continuously improving the incumbent corporate machinery that generates the revenue necessary for future investments.
Innovation is about inventing new products or services that solve customer needs and can be monetised. Innovation involves trial and error and learning from the same, a structured method of experimentation leads to better tracking of ROI. The pentathlon framework of innovation articulates the methodology from ideation to market launch. The influx of ideas, which form the innovation backlog, can be either disruptive ideas or new ways of resolving existing business challenges.
Each part of the innovation funnel has to imbibe a fail fastand and an iterative approach for further ideation with feedback loops. Every new invention undergoes inception, improvements and adoption followed by stability and subsequent depreciation. If there are many trains of thought in the innovation projects pipeline, there has to be an order in the way of prioritizing the projects. Prioritization of innovation projects should depend on
- Marketability — is there a potential market for the product/service?
- Feasibility — is it possible to deliver the project with the resources the company can afford?
- ROI — How soon is the breakeven point?
- Time to market — how soon can the MVP be launched?
The implementation of innovation projects are not very different from other corporate projects, involving a portfolio selection based on the prioritization and business urgency. The next stage involves scoping and development, preceeded by prototyping before scaling. Post validation and launch, the impact has to be measured and analyzed to understand the product adoption and customer experience. The insights from measuring innovation efforts lead to newer ideas or incremental improvements to exisiting business processes and/or the innovative product under consideration. There has to be a relentless flow of insights into the innovation funnel to finetune the ideas being considered for prioritization, implementation and launch.
The very existence of an innovation foundry within a coporate house has to be justified to the investors and shareholders. As a means to create a process of accountability there should be KPIs defined, some examples being:
- Number of ideas considered for prioritization
- Number of ideas that were productionalized
- Number ideas that have lead to business process improvement
- Value added (Value = Accrued benefits — costs)
- Time to breakeven
The major factors that influence an innovative culture at a corporate level depend on the company culture – the ability to thrive during change and adaptability to new market conditions. It is of utmost importance to recognise and reward the people who contribute to innovation and showcase and communicate the succesful results. Innovation labs within corporates cannot be run separately forever, the outputs from the innovation exercises need to flow back into the day to day business and the challenges from the core business need to be worked upon in the innovation labs.
With innovation being a crucial area of focus for most organisations, there are a lot of ideas floating regarding innovation management. It can be rather chaotic with buzzwords like Big data, AI, Robotics, Augmented Reality etc. being thrown around callously. Technology is a great enabler for business strategy, but great ideas arise from understanding customer requirements and the lack of products or services that fulfill the same.The most significant point of focus in any corporate innovation should be customer centricity and business gain.